That’s right, even though inventory is climbing, there are forces that are locking homeowners into their current homes, making it less desirable to make the decision to list.

PITI is Realtor-speak for Principal-Interest-Taxes-Insurance.  It is usually used to identify a payment to a buyer who now owns a property but has allowed the previous owner to remain for a period of time.  By covering the direct costs of home ownership for the first month, it is often agreed upon as a reasonable base rental payment to the new owner.

Today we will look at PITI in a different way, as individual pressures pushing homeowners to resist listing their homes.

First is Principal.  Home prices are at all time high, and escalating prices have forced many buyers out of the market.  Affordability is a major problem in this market, with CAR reporting only 16% of Californians are able to buy at these prices and rates.

Next is Interest.  Rates are stubbornly high.  Perhaps the biggest obstacle for listings.  People may love their house, but they adore their mortgage rates.  Note that our market annual sales began to drop significantly in 2022 at the same time mortgage rates changed.

Taxes are next.  The rise in taxes is directly tied to the rise in home prices, thanks to Prop 13.  Passed in 1978, Prop 13 defines property taxes at 1% of the sales price of a home, with a 2% annual increase allowed the tax assessor.  It was a good idea at the time, but today it prevents moving to a similar home, as the new home price drastically increases your property taxes.

The final issue is Insurance.  While it used to be something to just plan for, it has become a costly impediment to ownership. Insurance companies are dropping some current customers, while all are experiencing significant increases.  New buyers face having to accept THE FAIR PLAN rather than comprehensive insurance.  As of June 2025, the FAIR Plan’s total exposure is $650 Billion, reflecting a 42% increase since September 2024, and a 289% increase since September 2021.  See the LINK.  Current homeowners dread receiving mail from their insurer, and new buyers must immediately begin work to find insurance coverage to complete a purchase.

While there remains a large group of reasons why a homeowner needs to list their home for sale,  moving to another bigger or more expensive home has become more challenging than ever.

Now to the past month’s statistics.

For the Conejo Valley, listings are up 64% versus a year ago, while sales are up only 2%.  Median prices, with the same number of sales above that price as below that price, are the same as last year, no increase, no decrease.  The Average price, the total of sales prices divided by the number of sales, is up 5%.  Why the difference?  A stronger preponderance of very expensive homes.   These figures represent a three month total, comparing the current three months to the same months last year.  At the bottom of this table, the number of sales is also compared to the same period as last year,  This metric was previously strongly influenced by the most expensive homes.  However, nothing lasts forever.  The strong increase of highest price homes is now only slightly better than the same months last year, and is less of a driving force of Average price increases.  The total number of highest price homes have also been has also been affected by the raise in prices, placing more homes into higher categories.  The lack of growth in this sector is important to watch.  The market is balanced at 3 months, giving neither buyer nor seller a market advantage.  We are no longer in a sellers market.

Simi Valley and Moorpark have not previously had the same influence on their average prices, as the percentage of highest price homes was much lower than in the Conejo.  However, price increases and the relative affordability of homes in this area has caused this sector to become more attractive.  Listings in SImi/Moorpark are up 83% versus last year  The Median price is  up 1% while the Average price is up 4%.  The current inventory of homes represents close to 3 months of sales, approaching balance in the market.  Sales are about the same as they were last year at this time.; At the bottom of the  table we can see that higher priced homes are selling better than last year, while the biggest tranche of homes, between $750,0000 and $1 million. are selling much slower.

In past months, the dearth of inventory has limited sales and pushed prices up. That is no longer the case.  The inventory figures for 2023-2024-2025 are 225-312-511.   Inventory is no longer a constraint to sales.

Simi/Moorpark had extremely low inventory for 2023-2024.  No longer is this the case.  Inventory is plentiful. The inventory figures for 2023-2024-2025 are 98-175-321.  We have three times the inventory today than we had in 2023.

So if inventory is growing, and previously lack of inventory was thought to limit sales, have sales been growing?  No.  Sales are stuck at the same rate as 2023 and 2024.  The average of pre-COVID years for July was 246, while last month’s sales were only 175, practically the same as the past two years.

Looking at the same numbers a different way, the chart below shows the total number of sales as the year progresses.  We are right on track with the past two years of reduced sales.

The same can be said for Simi/Moorpark.  The 4-year average of sales of 196 is almost double the current 123.

The cumulative sales chart below is similar to Conejo, if anything a little slower.

Finally let’s look at prices.  The overall table we began with listed median and average  prices over a span of three months, basically smoothing the curve.  The charts below represent the median and average prices for each individual month.  You can see how the space between median and average has increased over time, but has not grown in the latest month, with Average prices moving downwards while median prices are very flat.

For Simi/Moorpark, the distance between the median and average lines has dramatically increased, showing the impact of sales in the higher price categories.

So that is past history.  What does it say about the future?  Frankly, the future depends a lot more about  news out of Washington than it does on past history.  The stock market, the bond market, the value of the dollar, consumer confidence, economic numbers are all over the place.  All the news involves politics rather than economics.  I am not a political wonk, and after only a couple of courses I am not really an economist, but I put more trust in historic numbers and trends than I do in daily news alerts.

NAR does try to influence Washington, and we have had some success.  The recent increase of SALT limits from $10,000 to $40,000 is good for real estate, particularly for first time homebuyers.  It returns almost full deductibility to mortgage interest and property taxes for new buyers.  The other issue NAR has been pushing has been raising the deduction on the profit on sale of a home from $250,000/$500,000 to $500,000/$1,000,000. Both parties seem to now be in favor of this change.  There are other things NAR is working on, such as first time buyer assistance, but the first two are a major win.

Washington has major influences on the housing market, from interest rates to taxes to incentives.  As the economy slows, there will hopefully be more movement in helping the housing market.  Stay tuned.

And stay safe out there.

Chuck